INVESTOR BUYING IN PHOENIX REAL ESTATE

I just read an article that Fannie Mae has recently

launched a home buyer’s program called “First Look”.  This program bars investors from purchasing a foreclosed property for the first 15 days that it is on the market.  This is terrific.  How can a first time homebuyer using an FHA program compete against an “all cash” investor buyer who can close within weeks.  It’s a matter of business and, of course the bank will take the all cash buyer….it’s easier for them.

This is a terrific way to get people who will stay in the homes for longer than an investor will.  I think we need to stabilize the market for awhile.

While I also represent investors, I think this is a move in the right direction for those buyers who are just trying to take advantage of the bargains out there (in the form of foreclosed properties) and have a home of their own.

Kudos to Fannie Mae….what about Freddie Mac now???

DELAY IN CLOSE OF ESCROW

If you’re in the process of purchasing a

home and your close of escrow has been scheduled, great!  Just don’t change anything.  The new disclosure requirements may delay your closing.  Be sure that you continually check with your lender to make sure you’re still on schedule.  ANY change to the mix, i.e., rate change, will require additional days for “disclosure” requirements.  Keep in mind that weekends and holidays are not “business days”.

When writing a contract language has been added to the effect that any delay in the close of escrow because of the new disclosure requirements imposed on lenders shall not be the fault of the buyer.  If you do not cover yourself, you could be charged “per day” for any delay.  So, be sure that the language is in the contract.

In today’s marketplace (especially so), an informed buyer is very important.  Make sure that you have an open relationship with both your lender and your realtor.

BUY VS. RENT

Should I just rent, or should I buy?  That

is the million dollar question.  Is it financially feasible to rent?  No, not necessarily especially in one Arizona county - Pinal.  The median home price in this county is $69,000.  That coupled with the low interest rates and availability of FHA loans — which require at minimum a 3.5% downpayment — make this a much better option than renting.  The communities this encompasses include Florence, Coolidge and Eloy.

DOWNSHIFT IN FORECLOSED PROPERTIES IN PHOENIX

From July to August, Phoenix saw a decline

in the number of foreclosed properties.  This according to ASU’s realty studies Director, Jay Butler.  The number of sales are up from the same time last year as well.  The foreclosures are driving the market and we will not really know if the housing market here in Phoenix is truly “recovered” until we see the investors slow down in their buying.  The true measure of a healthy market is “normal sales”…..i.e., people who want to move put their homes up for sale — not people are losing their homes and banks just want some if not all of their money back.

Prices have also increased here in the Valley.  A mere 1%, but it’s an improvement.  In one year, the prices (on the average) have dropped 29%.  Hopefully, we will be able to continue to see recovery.  This will also depend on the rate of unemployment and the state of the economy.  As you know all of these factors are tied together….it’s a house of cards, so to speak.  When you remove a bottom card, the whole tower falls.

Only time will tell.  Consumer confidence needs to return and we need to stop bleeding jobs and opportunity.  This is a capitalist economy and the government needs to let us come back on our own.  By artificially propped up the economy we’re just heading in the wrong direction.

PHOENIX HOUSING — BIDDING WARS

It was bound to come to this.  During this down

market, there are many investors who see the opportunity.  In addition, there are many home buyers who would like to take advantage of the good deals that are to be had in the Phoenix metro market.  There was an article in Saturday’s Arizona Republic outlining the problems home buyers are facing in this market place.  Many buyers are finding themselves up against investors with a lot of cash who are coming in and buying up properties.  The number of foreclosed properties is overwhelming and the number of buyers seems to be exceeding that (at least in some neighborhoods).  Most buyers cannot compete with all cash investors….that’s a clean deal.  In addition, many banks are taking multiple offers and then start a bidding war to bid up the price of the home.  It won’t get as bad as it was years ago, because the value is not there — at least not yet.

In addition, there are some unscrupulous realtors who are taking multiple offers on short sale properties or they are not taking offers that are not way above the asking price.  This is just wrong.  I’ve spoken with a couple of those agents.  They aren’t long for this business.  Some agents, who have been in the business for years, say this is the worst market they’ve seen.  Many buyers are frustrated at not only the amount of foreclosed properties and lack of any communication on the selling side, but that there are fewer “normal” sales out there.

A lot of people are staying put.  They will ride out the craziness and hopefully, will be able to sell when the market calms.  However, if you’re in one of the hardest hit areas, i.e., Queen Creek, you will most likely not see your values increase that much.  If you have equity in your home, hang in there.  Better days are ahead.  For those of you looking to buy, also hang in there because the short sales will morph into lender owned and you may luck out!

IT’S A GREAT TIME TO MOVE TO PHOENIX

Well, it’s fall and it’s our best time of year!  We wait all

through the hot summer to finally get to the “season” here in Phoenix.  It’s still a little hot during the day, but the daylight hours are shorter, thus the nights are getting cooler.  The real estate market here continues to move along.  While the bulk of the sales are below $200,000, there are many, many opportunities to get a great buy at all price points.  I’m not a fan of short sales — non-responsive selling agents — non-responsive banks — agents taking multiple offers to drive price up — months of waiting with no word.  Frankly, I try to steer people away from them unless there’s realtor notations that say that they have everything in place and can close.

Lender owned properties can sometimes be a challenge as well.  I’ve closed a couple of these, but once again you’ll have multiple offers and the selling agent (who is representing the bank) will come back with “submit your highest and best offer”….these do workout more often than short sales.  Keep in mind that these distressed properties are sold “as is”.  If you’re handy, it’s great so long as the property is structurally sound.  Be sure to get an inspection.  Most of these homes are also missing the kitchen appliances as well.

Because the short sale and lender owned properties are running the market, the “normal” type of listing is taking a hit.  However, keep in mind that there’s most likely someone living in the home and taking care of it on a day to day basis, the appliances are still in place, they will negotiate better than a bank, you’ll get answers to your offers.  Also, if you’re able to wait a little bit to buy, the short sales will eventually turn into lender owned if not sold prior to auction.

All in all it’s still a good time to move to Phoenix….our winters are worth the wait!  In addition, real estate is the best hedge against inflation…..